Senate Bill Strives to Balance Oil and Alternatives

By CARL HULSE

Published: June 29, 2005

The Senate overwhelmingly passed broad energy legislation on Tuesday, with its authors hoping the bill strikes a balance between traditional and alternative sources of power that can break a four-year Congressional stalemate over energy policy.

By a bipartisan vote of 85 to 12, the Senate approved a bill that includes $14 billion in tax incentives for oil and gas production as well as development of wind, solar and other emerging energy sources. It also rewards buyers of energy-efficient appliances and hybrid cars. The measure includes an additional $36 billion in energy-related projects, though many of them will require additional approval by Congress.

The shape of the Senate measure sets up a clash with the House, which has already passed its own version emphasizing increased domestic oil and gas production. The House also included a controversial plan to grant product liability immunity to producers of the gasoline additive MTBE, which has polluted groundwater around the nation.

The White House also objects to parts of the Senate bill, challenging its cost and its plan to require utilities to use more renewable fuels to generate electricity.

Senator Pete V. Domenici, Republican of New Mexico and chairman of the Energy and Natural Resources Committee, acknowledged the difficulties ahead. But Mr. Domenici said he believed that mounting pressure to produce a new national energy policy after years of impasse would lead to the differences being resolved.

''We have matters that are in disagreement, but I can say they are far less in importance than the matter before us, which is to get an energy bill,'' he said.

President Bush is pressing Congress to deliver a bill soon. Before the Sept. 11 attacks shifted the focus of the administration, a new energy policy was at the top of the White House's legislative list and remains a priority, particularly with the rising cost of gasoline and natural gas. But fights over MTBE and the emphasis on additional oil and gas production have shadowed the legislation since 2001.

Authors of the bill acknowledge that the new plan will do little immediately to reduce the cost to consumers of either gasoline or natural gas. But they say the push to develop new sources of fuel and diversify the nation's power sources will eventually lower prices as well as reduce pollution from traditional fossil fuels.

''In the long term, it puts in place some good policies that will move us in directions that will be very beneficial to American consumers, American industry and the American economy generally,'' said Senator Jeff Bingaman of New Mexico, the senior Democrat on the energy panel, who worked closely with Mr. Domenici.

Critics of the bill say it falls far short of what the nation could accomplish and does nothing to force changes in automotive fuel consumption.

The bill does direct the president to find ways to reduce overall consumption by one million barrels of oil a day by 2015, but the Senate rejected a broader goal of reducing oil imports by 40 percent within 20 years. Senators also rejected efforts to require limits on emissions believed to contribute to global warming.

''I voted against the energy bill because it is short on the truly bold action needed to break this country's addiction to foreign oil, and long on the traditional boondoggles that waste taxpayer money and fail to promote energy independence,'' said Senator Ron Wyden, Democrat of Oregon.

The Senate bill would require gasoline refineries to add at least eight billion gallons of biofuels like corn-based ethanol to the nation's gas supplies by 2012, a provision critical to gaining support from farm-state senators.

Both the House and Senate measures also include proposals to strengthen the nation's power grid and prevent blackouts. The Senate bill also seeks to encourage a rebirth in nuclear power, an energy source that is a favorite of Mr. Domenici's. The measure takes no position on drilling in the Arctic National Wildlife Refuge -- the House's bill allows drilling -- but senators hope to win drilling approval through a separate budget bill to be considered later this year.

At a news conference with the Senate sponsors, Energy Secretary Samuel W. Bodman said the administration was ready to play a role in working on a final piece of legislation acceptable to Congress and the White House.

The chairman of the House Energy and Commerce Committee, Representative Joe L. Barton of Texas, said he was eager to achieve a final deal as well.

''Obviously the House and Senate bills have differences to work out, and that is what conference committees are for,'' Mr. Barton said.

Mr. Barton and Representative Tom DeLay of Texas, the House Republican leader, have been the chief proponents of providing oil companies that produce MTBE with some protection from lawsuits over the cost of cleanup from pollution caused by leaking underground gas tanks. MTBE makes water undrinkable, but there is no conclusive evidence on health risks for low doses.

They say they can find a compromise that would avoid another Senate filibuster over the MTBE provision. In recent days, some lawmakers have been exploring the idea of adding the MTBE protection to a pending highway bill.

''We'll do whatever it takes to do this solution, wherever we can put it,'' Mr. DeLay told reporters.

Chart: ''Two Chambers, Two Bills''
Potential points of contention in Senate and House energy bills:

SENATE: Would protect producers of MTBE from product liability lawsuits associated with groundwater pollution.
HOUSE: No product liability protection for producers of the gasoline additive MTBE.

SENATE: Would require utilities to generate 10 percent of their electricity through renewable resources like wind by 2020.
HOUSE: No requirement for renewable fuels.

SENATE: Directs the president to reduce oil consumption by one million barrels a day by 2015.
HOUSE: No such requirement.

SENATE: No authority for arctic drilling.
HOUSE: Allows drilling on up to 2,000 acres of the Arctic National Wildlife Refuge.

SENATE: $14 billion in tax incentives for energy production and conservation, with a substantial amount devoted to new efficiency technologies and renewable fuels.
HOUSE: $8 billion in tax incentives aimed primarily at domestic oil and gas production.